Ken Fisher
Crystal Mercedes | CNBC
Fidelity has terminated a $500 million relationship with Fisher Investments, bringing the total yanked from the money manager to almost $1.8 billion.
Officials at the giant Boston-based asset manager confirmed it would end its relationship with Fisher on Monday, in light of inappropriate comments founder Ken Fisher made at an investment conference on Oct. 8.
Fisher managed $500 million in assets for Fidelity's Strategic Advisers Small-Mid Cap Fund.
"Fisher Investments does not provide investment advisory services for any portion of the assets of Strategic Advisers Small-Mid Cap Fund," said Vin Loporchio, a spokesman for Fidelity. "Assets previously managed by Fisher Investments have been reallocated within the fund."
While government-run pension funds make up a relatively small amount of the overall assets managed at Fisher Investments, $10.9 billion from 36 entities, according to the firm's regulatory filing with the Securities and Exchange Commission, how they respond may be a bellwether for other clients of the firm, industry experts say.
In all, Fisher had $94 billion in assets under management as of Dec. 31, 2018, according to their SEC filing. That figure reached $112 billion as of Sept. 30, 2019, according to the firm.
Fidelity is the fifth major institutional client to leave Fisher, based in Camas, Washington, since the billionaire made controversial remarks about sex at the Tiburon CEO Summit nearly two weeks ago. Previously, four government pensions pulled close to $1.3 billion from Fisher Investments.
CNBC obtained an audio recording of Fisher's comments at the Tiburon CEO Summit, as well as audio of him speaking at a previous conference. Clips from both were featured on CNBC's "Power Lunch." Combined, they show that the money manager made flippant remarks about sex.
In the audio obtained by CNBC, Fisher says at the Tiburon conference: "Money, sex, those are the two most private things for most people," so when trying to win new clients you need to be careful.
He says: "It's like going up to a girl in a bar ... [inaudible] ... going up to a woman in a bar and saying, hey, I want to talk about what's in your pants."
Further, when Fisher was a speaker at the Evidence-Based Investing conference in 2018 he compared marketing mutual funds to propositioning a woman for sex at a bar.
"I mean the, the most stupid thing you can do, which is what every mutual fund firm in the world always did, was to brag about performance, uh, in, in a direct mail piece, which is a little bit like walking into a bar if you're a single guy and you want to get laid and walking up to some girl and saying, 'Hey, you want to have sex?'" Fisher said, according to audio obtained by CNBC.
Organizers of both conferences subsequently banned him from speaking again in the future.
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Now, diving into the provided article about Fidelity terminating its $500 million relationship with Fisher Investments, let's break down the key concepts and provide relevant information:
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Fidelity's Termination of Relationship with Fisher Investments:
- Fidelity, a major Boston-based asset manager, has decided to end its relationship with Fisher Investments, a significant money manager.
- The termination, amounting to $500 million, is in response to inappropriate comments made by Fisher Investments' founder, Ken Fisher, during an investment conference on Oct. 8.
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Size of the Relationship and Reallocation of Assets:
- Fisher Investments managed $500 million in assets for Fidelity's Strategic Advisers Small-Mid Cap Fund.
- Fidelity spokesperson Vin Loporchio stated that Fisher Investments no longer provides investment advisory services for any portion of the assets of the mentioned fund. The assets previously managed by Fisher Investments have been reallocated within the fund.
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Government-Run Pension Funds' Response:
- While government-run pension funds constitute a relatively small portion of Fisher Investments' total managed assets ( $10.9 billion from 36 entities), the article suggests that their response could influence other clients' decisions.
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Fisher Investments' Total Assets Under Management (AUM):
- As of Dec. 31, 2018, Fisher Investments reported $94 billion in AUM.
- By Sept. 30, 2019, their AUM had increased to $112 billion.
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Previous Client Departures:
- Fidelity is the fifth major institutional client to sever ties with Fisher Investments.
- Prior to Fidelity, four government pensions had already pulled close to $1.3 billion from Fisher Investments due to controversial remarks made by Ken Fisher about sex at the Tiburon CEO Summit.
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Controversial Remarks and Audio Recordings:
- CNBC obtained audio recordings of Ken Fisher's controversial comments made at the Tiburon CEO Summit, where he made inappropriate remarks about sex.
- Fisher's comments included comparisons between marketing mutual funds and inappropriate propositions, leading to his banning from future speaking engagements at both the Tiburon CEO Summit and the Evidence-Based Investing conference.
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Impact on Fisher Investments:
- The departure of major clients and the controversy surrounding Ken Fisher's remarks could have broader implications for Fisher Investments, as industry experts suggest that how government-run pension funds respond may influence other clients' decisions.
This comprehensive breakdown provides a detailed understanding of the events, financial figures, and industry dynamics related to Fidelity's termination of its relationship with Fisher Investments.
